Changes set to improve implementation of the Sarbanes-Oxley investor protection law.
The Securities and Exchange Commission (SEC), has published a Concept Release as a prelude to its forthcoming guidance for management in assessing a company's internal controls for financial reporting.
Following a SOX implementation issues roundtable, the Commission issued a plan for improvements called "Next Steps for Sarbanes-Oxley Implementation." The Concept Release is one of the milestones in the plan, and brings the SEC closer to issuing guidance for management that has been lacking since the law was enacted in 2002.
The SEC learned from participants that while Section 404 has produced benefits, its implementation has been costly. The commission also received feedback about issues that remain to address, and actions that the SEC and the Public Company Accounting Oversight Board could take to make the internal control assessment and auditing more efficient and effective. A separate Advisory Committee on Smaller Public Companies reported, following a year-long study, that companies which have not yet undertaken the process have special concerns with both costs and procedures.
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